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transmit herewith a Ministerial Minute by Mr. Waterhouse, covering a Memorandum by Mr. Julius Vogcl, C.M.G., the Colonial Treasurer of New Zealand. I have, &c, The Right Hon. the Earl of Kimbeiiey. G. E. BOWEN.

Enclosure in No. 12. Memorandum by Mr. WiTERnorsE. Ministebs present to His Excellency for transmission to the Secretary of State, the accompanying Memorandum by the Colonial Treasurer on the Despatch from the Eight Hon. the Secretary of State on the subject of Intercolonial Reciprocity. The memorandum represents the views of Ministers. Wellington, 16th November, 1872. Gr. M. Watebhouse. Sub-Enclosure to Enclosure in No. 12. Memoeandum on a Circular Despatch from tho Eight Hon. the Seceetaby of State for the Colonies on Intercolonial Eeciprocity. The Colonial Treasurer has given careful consideration to the Earl of Kimberley's Despatch, dated 19th April, 1S72, on the subject of Intercolonial Eeciprocity. Though the long correspondence on the subject has rendered inoperative the Bill passed by the New Zealand Legislature, the passage of which, in some degree, led to that correspondence, yet the Colony has no reason to complain ; since it is evident, throughout the communications of the Secretary of State, that his objections have been urged in a spirit in no sense hostile to the Colonies, but, on the contrary, in one of anxiety to do justice to all parts of the Empire. Whether or not the Colonies agree with the Secretary of State, they cannot fail to recognize the conciliatory manner in which he has dealt with the question. The Colonial Treasurer proposes to confine himself as far as possible to comments upon those portions of the present Despatch which refer to his previous Memorandum. The Secretary of State, in his Despatch of July 13th, 1871, admitted the precedent of the British North American Provinces in favour of Intercolonial reciprocity, but qualified the admission by contending that the precedent applied to exceptional conditions, and that its operation was very limited. Similarly, in the Despatch now under consideration, Lord Kimberley admits that the precedents " are to a certain extent in point," and goes on to observe that tho application of the precedent "is exceedingly limited." This point underlies the whole contention of the Colonial Treasurer, and it involves a question rather of fact than of argument. In the previous Memorandum, it was pointed out at some length that the precedent of the British American Provinces went beyond the limited operation claimed by Lord Kimberley, and, indeed, that it went beyond that for which the Australasian Colonies were asking. In support of the application of the British American precedent, the following points were relied on :— 1. That one of tho first acts of the Legislature of the Dominion of Canada was to pass such a measure as the Australasian Colonies desire to have the power to pass. 2. That the provisions in respect to reciprocity were similar to those which were in an Act of 18G6, before the Dominion was constituted ; that that Act was a reproduction of a furmer Act; and, therefore, that the legislation was not new. 3. That Lord Kimberley, in stating "that it (the Dominion Act) was passed in the expectation " that, at no distant date, the other possessions of Her Mnjesty in North America would become part " of the Dominion," and that " tho assent of Her Majesty, given to a measure passed in circumstances " so peculiar, cannot form a precedent of universal and necessary application," virtually admitted that the Dominion Act was assented to not because of any omission to reconsider the expediency of former legislation, but, on the contrary, because the legislation was approved of in the expectation that the consolidation of Her Majesty's possessions in British America would be completed; that, therefore, the Australasian Colonies could not only appeal to the precedent as one of long standing, but also could appeal to it on the ground that it was recognized as compatible with, if not leading to, that very union which it is known the Secretary of State would highly approve of, iu the case of the Australasian Colonies. 4. That it was singular " Lord Kimberley should give twe instances only of British American " legislation of the kind, and that he should assign to that legislation the character of ' dealing with a " ' limited list of raw materials and produce not imported to these Colonies from Europe.' There are other " Acts of the British American Provinces of a similar nature, but which leave to the Governor in Council " to determine the articles to be admitted. Indeed, it is difficult to understand on what grounds Lord " Kimberley considers the two clauses which he quotes from the Newfoundland Act to have the " character he assigns to them. The clause quoted from the Prince Edward Island Act professes to " deal with 'raw materials and produce,' but includes several manufactures. The clauses from the " Newfoundland Act do not even profess to exclude manufactures from the list; and the first of those " clauses, instead of not dealing with goods imported from Europe, proceeds to the length of exempting " from duties the articles mentioned, being ' the growth, produce, or manufacture of the United " Kingdom.' " 5. That tho British American Acts " contain not only a discretionary power to admit colonial " articles free, but also to admit, under similar conditions, articles from the United States." These allegations are in no way denied by Lord Kimberley, and, indeed, they are undeniably correct; but his Lordship fails to recognize that they cut at the root of some of the reasons he urges. It seems to the Colonial Treasurer that one of Lord Kimberley's objections to granting the requests of the Colonies has, throughout the correspondence, been, that to do so would invite vast changes in